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進入《TAIPEI TIMES 焦點》 Far EasTone signs bond deal as part of move to acquire cable TV operator
Far EasTone Telecommunications Co Ltd spokesperson Lang Ya-ling speaks at a press conference in the Taiwan Stock Exchange in Taipei yesterday, announcing the company’s intention to acquire a major stake in the nation’s biggest cable-television operator China Network Systems Co. Photo: Wang Yi-hung, Taipei Times
By Lisa Wang / Staff reporter
Far EasTone Telecommunications Co Ltd （遠傳電信） yesterday said it has inked an agreement with Morgan Stanley Private Equity Asia IV （MSPE） to subscribe to corporate bonds issued by the latter’s local subsidiary, paving the way for its acquisition of a major stake in the nation’s biggest cable-television operator, China Network Systems Co （CNS, 中嘉網路）.
MSPE and several local investors plan to jointly acquire CNS via a newly created equity fund, North Haven Private Equity Asia IV LP （NHPEA）, according to Far EasTone.
Far EasTone is to spend up to NT$17.12 billion （US$542 million） in cash to subscribe to corporate bonds issued by NPHEA’s local subsidiary. The seven-year bonds carry a 3 percent annual return.
The deal would allow Far EasTone, the nation’s No. 3 telecommunications operator, to complete the last piece of its digital convergence drive, as the partnership with MSPE would help it tap into the nation’s cable TV and fledgling smart home markets.
CNS has a 25.7 percent share of the local cable TV market, with 1.29 million subscribers, Far EasTone said.
Far EasTone’s announcement came after a Wall Street Journal report early this month that the firm and Morgan Stanely’s private equity arm were nearing a US$2.3 billion deal to buy CNS from South Korean private equity firm MBK Partners LP.
“Due to a government ban, Far EasTone has to adopt such a complicated approach to gain access to the local cable TV business. We intend to invest in CNS after the ban is lifted,” Far EasTone spokesperson Lang Ya-ling （郎亞玲） told a media briefing yesterday.
Lang was referring to the Telecommunications Act （電信法）, which prohibits political parties, government agencies or the military from investing in the local media business.
Far EasTone is 2.89 percent held by government agencies, according to its filing with the Taiwan Stock Exchange.
The National Communications Commission （NCC） has proposed easing the restrictions to allow political parties, government agencies or the military to own up to 5 percent of a local media company’s equity. The proposal has yet to pass legislative review.
The collaboration with CNS via MSPE would help Far EasTone obtain quality broadband, fixed telephony and pay-TV offerings, company president Yvonne Li （李彬） told an investor teleconference.
Far EasTone’s cooperation with MSPE will have to be approved by the NCC, the Fair Trade Commission and the Investment Commission.
The Investment Commission yesterday said that if MBK Partners plans to sell its 60 percent stake in CNS to an MSPE subsidiary, the commission would ask the two parties to submit their respective applications for review.
Once the Investment Commission receives the applications, it will send the documents to the NCC to hear its opinion on the deal before the commission can start an official review, commission acting executive secretary Emile Chang （張銘斌） said by telephone.
He added that “the key to reviewing the deal between the two foreign equity firms will depend on the NCC’s stance.”
Additional reporting by Lauly Li
新聞來源：TAIPEI TIMES
